ECON-1010 Chapter Notes - Chapter 19: Gross Domestic Product, Unemployment Benefits, Negative Number

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mphyde

12 May 2022

School

Vanderbilt University

Department

Economics

Course

ECON-1010

Professor

Hojjatallah Ghandi

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ECON-1010 Full Course Notes

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Economic activity is most often measured by gdp. Wholesale goods, raw materials, and inputs not included in gdp do not count (not nal goods) Final good sale encompasses the value added at each intermediate step. Ex: if something is sold, but not produced, in 2010, then it will not be counted in. Consumption: spending by households, including durable goods, non-durable goods, and services. Investment: any spending intended to increase future output. Does not include buying a share of stock. 40% of gov"t budget not included in gdp. Transfer payments: social security, unemployment compensation, and welfare bene ts; all are essentially transferring income from one group of individuals to another. Trade surplus: if net exports is a positive number. Trade de cit: if net exports is a negative number. Think about total spending rather than total production for calculating gdp. Spending and production are inevitably the same. Every penny you spend becomes income to someone (except taxes)

Related Questions

The consumption component of GDP includes spending on:

a. durable goods and nondurable goods, but not spending on services.
b. durable goods and services, but not spending on nondurable goods.
c. nondurable goods and services, but not spending on durable goods.
d. durable goods, nondurable goods, and services.

burgundytoad340

1. In the actual economy, households

a. spend all of their income.

b. divide their income among spending, taxes, and saving.

c. buy all goods and services produced in the economy.

d. Both (a) and (c) are correct.

2. Gross domestic product is defined as

a. the quantity of all final goods and services demanded within a country in a given period of time.

b. the quantity of all final goods and services supplied within a country in a given period of time.

c. the market value of all final goods and services produced within a country in a given period of time.

d. Both (a) and (b) are correct.

3. GDP adds together many different kinds of products into a single measure of the value of economic activity by using prices determined by

a. banks.

b. economists.

c. the government.

d. markets.

4. Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has

a. caused measured GDP to fall.

b. not caused any change in measured GDP.

c. caused measured GDP to rise.

d. probably changed measured GDP, but in an uncertain direction; the direction of the change depends on the difference in the quality of the cleaning that has resulted.

5. A steel company sells some steel to a bicycle company for $150. The bicycle company uses steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

a. $150 to GDP.

b. $250 to GDP.

c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.

d. $400 to GDP.

6. The total sales of all firms in the economy for a year

a. equals GDP for the year.

b. is larger than GDP for the year.

c. is smaller than GDP for the year.

d. Any of the above is possible.

7. GDP is equal to

a. the market value of all final goods and services produced within a country in a given period of time.

b. Y.

c. C + I + G + NX.

d. All of the above are correct.

8. The consumption component of GDP includes spending on

a. durable goods and nondurable goods, but not spending on services.

b. durable goods and services, but not spending on nondurable goods.

c. nondurable goods and services, but not spending on durable goods.

d. durable goods, nondurable goods, and services.

periwinkletoad580

1. What does the investment component of GDP measure?

a. spending by households on goods and services

b. spending by government agencies on goods and services

c. spending on goods to be used in future production

d. spending on domestically produced goods by foreign buyers

2. A good produced in the current time period but put into a firm's inventory instead of being sold

a. is only included as a part of consumption in future GDP when it is sold.

b. is counted as consumption in the current GDP since it was produced in the current time period.

c. is excluded from the current GDP.

d. is considered unsold inventory and counted as a part of the investment in current GDP.

burgundycrow837

ECON-1010 Chapter Notes - Chapter 19: Gross Domestic Product, Unemployment Benefits, Negative Number

ECON-1010 Full Course Notes

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